(Bloomberg) — Social Capital, the venture capital firm led by podcaster and former Facebook executive Chamath Palihapitiya, fired two of its partners, citing an undisclosed “situation,” according to a letter sent to its investors that was reviewed by Bloomberg.
Most Read from Bloomberg
Palihapitiya said that Jay Zaveri and Ravi Tanuku were both terminated after the firm became aware of the situation last week. The company hired the law firm Wachtell, Lipton, Rosen & Katz and subsequently fired the two partners over the weekend. Palihapitiya informed investors of the move Tuesday via email.
“We became aware of a situation last Tuesday and after probing internally, retained Wachtell Lipton to investigate the matter on Thursday,” Palihapitiya wrote. “On Sunday night we terminated Jay Zaveri and Ravi Tanuku.”
While the firm has declined to elaborate on the reasons for the firings, one person familiar with the matter said that it stemmed from perceived breaches of company policy.
The situation is related to the AI startup Groq Inc., according to one person. Groq was backed by Social Capital in 2017 and 2018, and has since surged in value, reaching a $1.1 billion valuation in 2021, according to PitchBook data. Zaveri is on the board of Groq according to his LinkedIn profile. A representative for Groq did not immediately respond to a request for comment. The Financial Times earlier reported Groq’s involvement.
In a post on X on Tuesday, Social Capital wrote, “We have terminated the employment of two of our employees due to employee-specific circumstances. We have no further comments at this time.”
“Mr. Zaveri’s firing was unfair and undeserved,” a spokesman for Zaveri said. “The firm’s leadership approved and participated in the investment that is now being used as a pretext to fire him. Mr. Zaveri stands by his 28-year track record of integrity and looks forward to the truth coming out.” Tanuku did not respond to requests for comment.
In his letter, Palihapitiya added that Social Capital is “working with the CEOs of all the portfolio companies on whose boards Jay sat to effect an orderly transition and we do not foresee any major issues.”
In a related move, the firm said that Steve Trieu will serve as its global chief financial officer on an interim basis, “overseeing all finance aspects of the organization.”
Trieu, who was involved with Social Capital’s special-purpose acquisition companies, stepped back from the firm in May 2021, according to his LinkedIn profile.
Social Capital spent recent years at the forefront of the SPAC boom. The strategy provided startups with an alternate route to initial public offerings or direct listings, often allowing companies to go public earlier than they might otherwise be able to. His early and prolific involvement earned Palihapitiya the nickname the “SPAC King.” However, some of the companies his SPACs merged with — including Opendoor Technologies Inc. and Virgin Galactic Holdings Inc. — took a dive after going public.
(Updates with Zaveri’s response in seventh paragraph. A previous version of this story corrected Trieu’s title.)
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.
Source link
